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Tuesday, 16 August 1960

The National Welfare Fund Act 1952 provides that the payment from Consolidated Revenue to the National Welfare Fund each year should be equal to the actual expenditure from the Fund in that year. Expenditure from the Fund was £299,363,000 in 1959-60 and, after taking account of the Budget proposals, is estimated at £330,698,000 in 1960-61. Detailed explanations of the estimated increase of £31,335,000 in expenditure from the Fund in 1960-61 are given in Statement No. 5. National Welfare Fund Estimates, 1960-61.

 

Departmental expenditure is estimated to be £3,760,000 greater in 1960-61 than in 1959-60. The additional cost in the full year of the increases in wage and salary margins granted during 1959-60 is expected to be approximately £2,000,000. On the other hand, the occurrence of one less payday in 1960-61 than in 1959-60 (when there were twenty-seven pay-days) is expected to result in a saving of £1,800,000 in Departmental expenditure.

Some of the more important factors affecting the estimated expenditure of individual Departments in 1960-61 are as follows: -

Prime Minister's. - Of the estimated increase in expenditure, £74,000 is attributable to the National

Library and £93,000 to the Public Service Board. Provision has been made for increased expenditure by the Public Service Board in developing personnel records and statistics.

External Affairs. - The full staffing of the Moscow Embassy, expenditures in connexion with the diplomatic posts opened in Belgium and the United Arab Republic in 1959-60, and the increased cost of the Courier Service are the main factors responsible for the estimated increase in expenditure in 1960-61.

Treasury. - To meet the increasing demands being made upon it now that the State statistical services have been fully integrated, it is estimated that expenditure by the Bureau of Census and

Statistic* will increase by £182,000 in 1960-61. Most of this increase reflects expenditure on additional staff and the hire of machines. The administrative costs of the Taxation Branch are expected to increase by £242,000, including £175,000 for salaries. The cost of Treasury Administration is estimated to increase by £86,000, largely due to expenditure on new accounting equipment.

Interior. - £133,000 of the estimated increase of £565,000 in expenditure in 1960-61 is offset by reductions in expenditure charged to the Australian Capital Territory votes elsewhere in the Budget. Rentals of office premises are estimated to increase by £90.000, and a further £92,000 is provided for the office services of expanded accommodation occupied jointly by departments, part of which has previously been met from the votes of the departments concerned. Provision is made in respect of the Bureau of Meteorology for improvement and expansion of transmission facilities, at in additional cost of £80,000, and for filling vacant staff positions, £50,000.

Works. - The cost of repairs and maintenance for Civil Departments under this head is estimated to increase by £138,000 in 1960-61. An additional £50,000 has been provided for the hire of services of private achitects and consultants.

Civil Aviation. - It is expected that there will be an increase of £146,000 in administrative costs, an increase of £316,000 in the costs of operating and maintaining aerodromes and air route facilities, and an additional £71,000 for meteorological services. However, reductions of £348,000 in the contribution towards the cost of ground facilities in the Pacific and of £176,000 in grants for the development of aerodromes by local governments are expected.

Health.- The increase of £280,000 is largely due to greater administrative expenses arising from the widening of the Pharmaceutical Benefits Scheme from 1st March, 1960, and the provision from 1st January, 1960, of " Special Account " benefits in certain circumstances to patients in hospitals not generally recognized for this purpose.

National Development. - Expenditure by the Division of National Mapping and the Bureau of Mineral Resources is estimated to increase by £74,000 and £325,000, respectively. These increases are mainly to provide for additional work associated with the search for oil in Australia.

Commonwealth Scientific and Industrial Research Organization. - It is estimated that gross expenditure by the Commonwealth Scientific and Industrial Research Organization will rise by £789,000 in 1960-61, involving an increase in employment of 119 officers. Of the gross increase, £500,000 will be met from the Commonwealth Budget and £289,000 from additional grants from outside sources. The main increases in expenditure a-e expected to be on research associated with sheep and cattle, plants, soils, chemical industries and land use.

Australian Atomic Energy Commission. - An additional provision of £319,000 has been made for more staff to enable the programmes of research being undertaken at Lucas Heights and associated laboratories to be expanded. Other expenditures, largely on exploration and the stockpiling of ores, are expected to decline.

Item No. 16. - Bounties and Subsidies.

Estimated Expenditure1960-61, Compared with Actual Expenditure 1959-60.

 

Dairy Products Bounty. - The Dairying Industry Act 1957 provides for the payment of a bounty on butter and cheese produced during the five-year period ending 30th June, 1962. Expenditure on the bounty in 1959-60 was £13,500,000. The same provision is made for 1960-61.

Cellulose Acetate Flake Bounty. - The Cellulose Acetate Flake Bounty Act 1956-1959 authorizes payment of a bounty of lOd. per lb. (subject to an annual limit of £142,000) on cellulose acetate flake produced in Australia and sold for use in the local manufacture of rayon yarn up to 30th

June, 1961. It is expected thai expenditure in 1960-61 will be slightly less than in 1959-60.

Copper Bounty. - Under the Copper Bounty Aci 1958-1960 a bounty of up to £45 per ton is payable, subject to certain conditions, on copper produced and sold for domestic consumption up to 31st December, 1960. The estimated expenditure of £200,000 in 1960-61 represents provision for payment of bounty on approximately nine months' sales (including sales in the last quarter of 1959-60). The question of assistance to the industry after expiry of the present Act will be considered at the appropriate time.

Cotton Bounty. - Under the Cotton Bounty Act 1951-1958 a bounty is payable on seed cotton delivered by growers to processors up to 3 1 st December, 1963. The rate of bounty is designed to give growers an average return of 14d. per lb. The higher estimate for 1960-61 allows for an expected increase in the 1961 crop and for substantia1, final payments in respect of the 1960 crop.

Flax Fibre Bounty.- The Flax Fibre Bounty Act 1954-1957 authorizes payment of a bounty on flax fibre produced and sold in Australia up to 3 1st October, 1960. The rate of bounty varies inversely with movements in the landed cost of imported flax fibre, but is subject to a maximum rate of £65 per ton. The lower estimate for 1960-61 is due to the reduction in the number of flax mills in Australia following the decision to wind up the Flax Commission's operations, and also to the limited further period of operations of the Flax Fibre Bounty Act.

Gold-Mining Subsidy. - The Gold-Mining Industry Assistance Act 1954-1959 provides for payment of a subsidy, under certain conditions, on gold produced up to 30th June, 1962. The rate of bounty payable to small producers (those with an annual output of not more than 500 ounces) is £2 8s. per ounce. The rate for large producers is an amount per ounce equal to three-quarters of the amount by which average cost of production exceeds £13 10s. per ounce, subject to a maximum rate of £3 5s. per ounce. A higher level of advance payments in 1959-60 is expected to reduce payments in 1960-61.

Rayon Yarn Bounty. - The Rayon Yarn Bounty Act 1954-1959 authorizes payment of a bounty of 6d. per lb. (subject to an annual limit of £100,000) on continuous filament acetate rayon yarn produced and sold in Australia up to 30th June, 1962. Expenditure in 1960-61 is expected to be slightly less than in 1959-60.

Sulphuric Acid Bounty. - The Sulphuric Acid Bounty Act 1954-1960 and Regulations thereunder provide for payment of bounty on sulphuric acid produced in Australia up to 3 1st December, 1960. The estimated expenditure of £1,140.000 in 1960-61 represents provision for payment of bounty on approximately nine months' sales (including the last quarter of 1959-60). The question of assistance to the industry after expiry of the present Act will be considered at the appropriate time.

Tractor Bounty. - The Tractor Bounty Act 1939-1959 provides for payment of bounty on the production of wheel-type tractors for use in the Commonwealth or a Territory up to 30th June, 1966. The rates were increased considerably as from 1st July, 1959. Production of tractors by eligible producers increased in 1959-60 following the increase in the bounty rates, and the higher estimate for 1960-61 makes allowance for a further expected increase in production.

Item No. 17. - Miscellaneous Expenditure.

Estimated Expenditure1960-61, Compared With Actual Expenditure 1959-60.

Prime Minister's Department. - The main items of expenditure provided from this vote are the Commonwealth Scholarship Scheme (£2,487.000) and the running expenses of the Australian National University (£1,801,000). Expenditure on the Commonwealth Scholarship Scheme is estimated to be £319,000 greater than last year, due to increased numbers of post-graduate scholars and Commonwealth Scholarship holders in training, and to increased university fees. It is estimated that an additional £442,000 will be required for the running expenses of the Australian National University. This includes an amount of £262,000 for the Canberra University College which is shortly to become the School of General Studies of the Australian National University. (Provision for running expenses of the Canberra University College up to the time of its incorporation in the Austraiian National University has been made in the Australian Capital Territory votes of the Department of the Interior.) Provision has also been made for the payment of the full amount of a grant of £275,000 to Tasmania for flood relief, and for payment of the remaining balance of a grant offered to Queensland for cyclone relief.

External Affairs. - The main increases under this item are an additional £68,000 for expenditure on the Australian Antarctic Research Expedition, and an additional £27,000 for Australia's contribution towards the cost of the United Nations Emergency Force.

International Development and Relief. - Colombo Plan expenditure is estimated at £4,800,000, an increase of £338,000 over last year. Provision has been made for higher expenditures on both technical assistance and economic development. Included in the Colombo Plan estimate is a provision of £186,000 for an initial Australian contribution towards the International Rank Indus Basin Development Scheme. This contribution is subject to agreement being reached between India and Pakistan on the proposed division of the wafers of the Indus River system. An amount of £751,000 has also been provided for the humanitarian and aid programmes of the United Nations, including increased contributions to the United Nations Children's Emergency Fund, United Nations Technical Assistance, United Nations Relief and Works Agency for Palestine Refugees and the World Health Organization Malaria Eradication Programme.

Treasury. - Expenditure in 1960-61 is estimated at £144,000 more than in 1959-60, mainly due to provision for expenditure on the 1961 Census.

Health. - Expenditure in 1960-61 is estimated at £160,000 less than in 1959-60, largely because of reduced provision this year for payments to New South Wales for cattle tick control and eradication.

Trade.- The provisions for trade publicity and for the promotion of overseas investment in Australia have been increased by £152,000 and £15,000, respectively.

Social Services. - The decrease of £291,000 ;s almost wholly in respect of financial assistance estimated to be required for the building of homes for the aged. The Government is contributing on a £2 for £1 basis with approved organizations towards the capital cost of building homes for the aged. It is expected that the call on Commonwealth contribution in 1960-ul will be £272,000 less than in 1959-60.

Shipping and Transport. - The subsidy for merchant ship construction is expected to rise by £1,158,000 because of the incidence of expenditure on the current shipbuilding programme. The cost of operating the coastal radio service is expected to increase by £40,000. There will be savings of £49,000 following cessation of the subsidy for the Tasmanian Shipping Service, and. £130,000 as a result of the non-recurring expenditure in 1959-60 associated with the winding-up of the Australian Shipping Board.

National Development. - Provision has been made for expenditure of £1,400,000 in 1960-61 on oil search subsidies. Expenditure on these subsidies in 1959-60 was £360,000.

Immigration. - This vote is primarily to provide for expenditure on assisted migration, and on the maintenance of migrants upon their arrival in Australia. It is estimated that expenditure required will be £126,000 less in 1960-61.

Diesel Fuel Taxation - Rebates. - With increasing use of exemption certificates by purchasers of fuel for exempted purposes, refunds of duty collections from automotive diesel fuel are expected to fall by £72,000.

International Bank Subscriptions. - Australia has made arrangements with the International Bank for Reconstruction and Development to make yearly releases of its 18 per cent, subscription in Australian currency for use in the Bank's lending operations in member countries. At the request of the Bank, Australia redeemed in 1959-60 £2,930,000 of non-negotiable non-interest-bearing securities issued to the Bank in 1947 as part of Australia's capital subscription. The redemptions were met from Consolidated Revenue Fund in accordance with the International Monetary Agreements Act 1947, and provision has been made for a further £2,930,000 to be made available to the Bank in 1960-61 under these arrangements. A payment of £595,000, representing an increase in Australia's subscription to the Bank, was also made in 1959-60. No similar payment is expected in 1960-61.

International Development Association. - A Bill authorizing Australia's membership in the International Development Association received the Royal Assent on 26th May, I960. The International Development Association Agreement is to enter into force at any time on or after 15th September, 1960, when it has been signed on behalf of Governments whose subscriptions aggregate at least $650 million. The initial resources proposed to be provided for the Association are $1,000 million. The subscription assigned to Aus.tralia is $20,180,000 (£A.9,099,000) and will be payable over a five year period commencing from the date of commencement of operations. Provision has been made for payment in 1960-61 of £2,072,000, which represents the first year's instalment. The instalments during the succeeding four years will each amount to £1,734,000.

International Monetary Fund. - Australia paid an amount of £11,217,000 to the International Monetary Fund in 1959-60, being the gold portion of its increased subscription to the Fund. No similar payment is expected in 1960-61.

Public Service Pensions and Retiring Allowances. - The increase in this item reflects the full year cost of increases in pensions provided by the Defence Forces Retirement Benefits Act 1959, together with the normal increase in Government contributions to the Superannuation Fund and the Defence Forces Retirement Benefits Fund.

Wool Research.- The provision of £1,000,000 represents the Commonwealth's contribution to the Wool Research Trust fund in accordance with the Wool Research Act 1957.

Other. - This item includes Parliamentary Allowances and other statutory payments of salaries and allowances, and the fixed statutory grant of £325,000 towards the expenses of the Australian National University.

 

Railways. - The estimated increase in expenditure of £554,000 allows for additional costs of maintaining the permanent way and rolling stock, and for a greater volume of traffic.

Post Office. - Expenditure in 1960-61 is estimated to be £2,099,000 greater than in 1959-60. However, expenditure in 1959-60 included the cost (£2,950,000) of an extra pay-day and if this were left out of account the estimated increase in expenditure in 1960-61 would be £5,049,000. Of this amount, £2,360,000 is required to meet the cost for a full year of the increases in wage and salary margins. Payment for a full year of the staff recruited in 1959-60 and the engagement of new staff during 1960-61 is estimated to cost an additional £550,000 this year. General expenses are expected to increase by £680,000, including the increased cost of printing telephone directories and stamps and of maintaining up-to-date information on new and altered telephone numbers. Expenditure on stores and materials is expected to increase by £156,000. Payments to mail contractors are expected to increase by £238,000, mainly due to the fact that practically all first class mail is now carried by air.

Sound Broadcasting. - The estimated increase in expenditure of £163,000 is mainly attributable to the increased cost of operating national stations.

Television. - With the extension of television to all State capitals during 1959-60, expenditure on the national television service is expected to increase by £1,200,000 in 1960-61.

 

Northern Territory. - The requirements of the Northern Territory Administration account for £302,000 of the total estimated increase of £578,000 in expenditure in the Northern Territory. Repairs and maintenance will cost a further £106,000 and health services an additional £88,000.

Australian Capital Territory. - Expenditure under this head is expected to rise in 1960-61 by £582,000 because of the continuing growth in population and development of the National Capital. Additional expenditure is envisaged on repairs and maintenance (£196,000), the upkeep of parks and gardens (£136,000), education services (£94,000) and the operation of water supply and sewerage services (£72,000).

Papua and New Guinea. - Practically the whole of this expenditure takes the form of a grant by the Commonwealth to the Administration of the Territory of Papua and New Guinea to meet the deficiency between local revenue and expenditure in the Territory. Expenditure in 1960-61 is ex pected to exceed that in 1959-60 by £1,697,000 to enable overall expansion of Administration activity. In particular, provision has been made for increased assistance to the Administration for health and educational services, additional residential accommodation and other capital projects.

 

Financial Assistance Grants. - At a Premiers' Conference held in June, 1959, agreement was reached on new arrangements for the payment of financial assistance grants to the States to supersede the payments made under the States Grants (Tax Reimbursement) Act 1946-1948 and the annual States Grants (Special Financial Assistance) Acts. The new arrangements involved a reduction to two in the number of States regularly dependent upon special grants recommended by the Commonwealth Grants Commission and a reduction in the dependence of those States on special grants. It was agreed that the new grant arrangements would apply for a period of six years. The arrangements agreed upon at the Premiers' Conference were subsequently embodied in the States Grants Act 1959.

The total general revenue grants paid to the States in 1959-60, the first year of the new arrangements, compared as follows with the general revenue grants paid in 1958-59: -

 

Under the new legislation the financial assistance grants payable to each State in each year after 1959-60 are to be determined by adjusting the grant paid to each State in 1959-60 in accordance with a formula based on movements in the population of that State and annual increases in the level of average wages for Australia as a whole. A " betterment factor " is also included in the formula to assist the States to improve the standard and range of services they provide. The effect of the " betterment factor " is to increase the average wages factor used in the formula by 10 per cent. over the actual increase in average wages in each year.

Thus the financial assistance grant payable to each State in 1960-61 is derived by multiplying its per capita grant for 1959-60 (calculated by using the population figures as at 1st July, 1959) by the population of that State at 1st July,1960, and by increasing the resultant amount by a percentage equal to 1 . 1 times the percentage increase in the level of average wages for Australia as a whole between 1958-59 and 1959-60.

The Commonwealth Statistician's final determination of the financial assistance grant payable to the States in 1960-61 under the legislation will be made later in the year when the necessary statistics become available. According to preliminary estimates made by the Statistician, these grants will total approximately £267,622,000, or £23,122,000 more than the financial assistance grants paid in 1959-60. The estimated financial assistance grants payable to individual States in 1960-61 are compared in the following table with the grants paid in 1959-60: -

 

The estimated amounts of total general revenue grants payable to the States in 1960-61, including the special grants recommended by the Com monwealth Grants Commission, compare as follows with the general revenue grants paid in 1959-60:-

 

Special Grants. - Prior to the establishment of the Commonwealth Grants Commission in 1933, grants comparable to the present special grants had been made to Western Australia since 1910, to Tasmania since 1912 and to South Australia since 1929. Since 1933 special grants have been the subject of recommendations by the Commonwealth Grants Commission.

Under the agreement reached at the Premiers' Conference in June, 1959, Western Australia and

Tasmania will continue to apply for special grants. The Premier of South Australia and the Premier of Queensland agreed that their States would in future exercise the privilege of applying for special grants only in special or unexpected circumstances which endangered their budgetary positions relative to those of other States.

In accordance with these arrangements, the Government of South Australia withdrew the claim which it had previously made for a special grant in respect of 1959-60. It was agreed, however, that the Commission should be requested to advise whether any adjustments should be made to the special grants which had been paid to South Australia in respect of 1957-58 and 1958-59. The Commission subsequently recommended two adjusting grants totalling £1,426,000 to South Aus tralia in respect of those years and these grants were paid during 1959-60.

The following table shows the amounts of the special grants paid to the States in each of the last seven years and the amounts which the Commonwealth Grants Commission has recommended for payment in 1960-61: -

 

Under the procedures currently adopted by the Grants Commission, the special grants recommended each year are composed of two parts. One part is based upon the Commission's estimate of a State's financial needs for the year in which the grant is to be paid. This part is regarded by the Commission as an advance payment subject to final adjustment two years later, when the Com mission has examined the audited budget results of the State for that year. The other part of the grant represents a final adjustment of the special grant paid two years earlier. In the table below the special grants recommended by the Grants Commission and paid in 1959-60 are compared with those recommended for payment in 1960-61:-

 

Payments under Financial Agreement. - Under the Financial Agreement, which was entered into by the Commonwealth and the States in 1927, the Commonwealth contributes towards interest and sinking fund payments in respect of the States' debts existing at 30th June, 1927, and towards sinking fund payments in respect of debt incurred after that date.

The Financial Agreement provides that the Commonwealth will, in each year during the period of 58 years commencing on 1st July, 1927, contribute a fixed amount of £7,584,912 towards the interest payable on the States' debts. This amount is payable to the States as follows: -

 

The sinking fund contributions made by the Commonwealth in respect of the States' debts vary according to the nature and extent of thenborrowings and are paid direct to the National Debt Sinking Fund. In 1959-60 these contributions amounted to £5,942,000; the contributions in 1960-61 are estimated at £6,377,000.

Commonwealth Aid Roads. - A new scheme of Commonwealth assistance to the States for roads was established by the Commonwealth Aid Roads Act 1959.

Under this Act, which is to operate for a period of five years from 1st July, 1959, the Commonwealth has undertaken to make available up to £250,000,000 to the States for the construction, reconstruction, maintenance and repair of roads.

Of this amount, a total of £220,000,000 will be paid to the States as basic grants for roads over the five years. These basic grants are fixed annual amounts which rise progressively by £2,000,000 a year from £40,000,000 in 1959-60 to £48,000,000- in 1963-64. In each year the grants will be dis- tributed between the States on the basis of S per cent, of the total to Tasmania and the balance shared between the other five States one-third in proportion to their respective populations at the date of the last preceding Census, one-third in proportion to their respective areas, and one-third in proportion to the respective numbers of motor vehicles registered in those States at 31st December preceding the year of payment.

The balance of up to £30,000,000 over the five years will be made available to the States as matching assistance for roads. The total amounts of matching assistance available will increase by £2,000,000 a year from £2,000,000 in 1959-60 to £10,000,000 in 1963-64. Up to the limit of its share of the total matching assistance available in any year, each State qualifies for £1 of matching assistance from the Commonwealth for each £1 by which the amount it allocates in that year from its own resources for expenditure on roads exceeds the amount so allocated in 1958-59. The share of each State in the total matching assistance available in any year is determined by the same formula as is used to determine its share of the basic grant in that year.

Including both the basic grants and the maximum amounts of matching assistance for which the States may qualify, the Commonwealth has therefore undertaken to make available to the States for roads under the present scheme amounts which rise by £4,000,000 a year from £42,000,000 in 1959-60 to £58,000,000 in 1963-64.

The full amount of the matching assistance available to each State in any year is being paid during that year on the understanding that the road grants to the State in the following year will be adjusted if it is subsequently found that the State did not qualify in full for the matching assistance paid to it in that year. Provided no such adjustments are found to be necessary in respect of the matching assistance made available to the States in 1959-60, the amounts which each State will receive by way of basic grant and matching assistance in 1960-61 are as follows: -

The total road grants paid to each State in recent years are compared below with the grants that are expected to be paid in 1960-61.

 

As previously mentioned, the current Commonwealth Aid Roads legislation provides for an increase of £4,000,000 a year in the total amounts payable to the States for roads. The reason why the road grants payable to the States in 1960-61 show an increase of only £2,077,000 on the road grants paid in 1959-60 is that road payments in the latter year included two special, non-recurring items. In 1959-60 a final adjusting payment of £1,669,000 was made to the States to complete commitments under the Commonwealth Aid Roads Act 1954-1956, which expired on 30th June, 1959, and a special payment of £254,000 was made to

Western Australia under the provisions of Section 4 (3) of the Commonwealth Aid Roads Act 1959.

Financial Assistance to States for Universities. - Payments to the States for universities were first introduced in 1951-52 under the States Grants (Universities) Act 1951, and were continued under similar legislation passed in 1953, 1955, 1956 and 1957. Following the Government's acceptance of the main recommendations of the Committee on Australian Universities, the provisions of the 1957 Act relating to financial assistance for 1958 were superseded by the States Grants (Universities) Act 1958, which operated from 1st January of that year.

This Act authorizes the Commonwealth to make payments to the States for universities of up to £21,400,000 over the three calendar years1958 to 1960, inclusive, provided certain conditions have been met by the States. These payments include increased contributions towards the running expenses of universities, emergency grants and grants for capital works and for equipment. Prior to the 1958 Act, Commonwealth assistance was related only to the running expenses of universities.

As recommended by the Committee on Australian Universities, an Australian Universities Commission has been appointed, under the authority of the Australian Universities Commission Act 1959, to inquire into and make recommendations on the subject of Commonwealth assistance to the States for universities in 1961 and subsequent years. The Government has had the benefit of the preliminary views of the Australian Universities Commission on future university needs. When the report of the Commission is available later in the year, the Government will examine the position further. In the meantime £11,000,000 has been included in the Budget to permit the continued development of State universities in the current financial year in co-operation with the States. This compares with actual expenditure by the Commonwealth of £7,628,000 in 1959-60.

The estimated grants payable to individual States in 1960-61 are compared in the following table with the grants paid in each of the last seven years: -

 

Tuberculosis Hospitals - Reimbursement of Capital Expenditure. - Under the Tuberculosis Act 1948 the Commonwealth undertook to reimburse the States for capital expenditure on buildings, furnishings, equipment and plant for the diagnosis, treatment and control of tuberculosis. It is estimated that expenditure in 1960-61 will be £577,000, which is the amount the States are likely to claim during the year in reimbursement of their expenditure on approved capital items. Expenditure in 1959-60 was £781,000.

The distribution of Commonwealth grants under the Tuberculosis Act 1948 in recent years is shown in the table below: -

 

Mental Institutions - Contribution to Capital Expenditure. - The States Grants (Mental Institutions) Act 1955 provides for Commonwealth grants of up to £10,000,000 to the States for the building and equipping of mental hospitals, on the basis of £1 from the Commonwealth for each £2 spent on these purposes by a State. The aggregate grant was apportioned among the States on a population basis. Expenditure by the Commonwealth in 1959-60 amounted to £1,147,000, and brought total

Commonwealth expenditure under the scheme to £3,544,000. It is estimated that expenditure in 1960-61 will be £843,000, including £84,000 for Victoria, which is all that remains of that State's share of the aggregate grant.

The following table shows the actual payments to each State in each year since the inception of the scheme, and the estimated payments for 1960-61:-

Coal Mining Industry - Long Service Leave. - rn the States in which coal-miners have been awarded long service leave by industrial tribunals, the State Governments concerned have agreed to reimburse employers for the costs they incur in granting this leave. The Commonwealth in its turn has agreed to reimburse the States for the amounts paid and the administrative costs incurred by the States in giving effect to these arrangements. To provide the funds required for these purposes, an excise was imposed on coal under the Coal Excise Act 1949. An amount equivalent to the proceeds of the excise is appropriated to a Trust Account under the States Grants (Coal Mining Industry Long Service Leave) Act 1949-1956. The appropriation is estimated at £390,000 in 1960-61, compared with £484,000 in 1959-60. The rate of excise was reduced in 1959-60.

The amounts of excise collections credited to the Coal Mining Industry Long Service Leave Fund in respect of individual States in each of the last seven years, and the estimated credits to the Fund for those States in 1960-61, are compared in the table below: -

Yearly payments from the Fund do not correspond with excise receipts, but are mainly determined by the rate at which leave is taken. At 30th June, 1960, a balance of £2,109,000 was held in the Fund against accrued commitments.

Western Australia Waterworks. - Under the Western Australia Grant (Water Supply) Act 1948-1957 the Commonwealth is, within specified limits, assisting the State of Western Australia to finance the cost of- constructing the Comprehensive Water Supply Scheme. The scheme involves the reticulation of water to townships and homesteads in a wheat belt area of about 4,000,000 acres inland from Perth; reticulation of water to towns along the Great Southern Railway from Beverley to Katanning; and an increase in the supply of water to the Eastern Goldfields area of the State. During 1959-60 payments to Western Australia under this legislation amounted to £609,000, bringing total payments by the Commonwealth in respect of the scheme up to £4,422,000. The limit on Commonwealth contributions under the legislation is £5,000,000. It is estimated that final payments amounting to £578,000 will be made under this Act in 1960-61.

Payments in each year since the inception of the arrangements are set out below: -

 

Western Australia Northern Development Grant. - The Western Australia Grant (Northern Development) Act 1958-1959 provides for payment to the State of Western Australia of financial assistance of up to £5,000,000 in respect of development expenditure by the State in the area of Western Australia north of the twentieth parallel of latitude during the period of five years commencing on 1st July, 1958. Under the scheme Commonwealth assistance is provided in respect of projects, nominated by the State, which the Commonwealth is satisfied will contribute to the development of the area and which could not reasonably be expected to be carried out during the period of five years without the grant of Commonwealth assistance.

Payments to the State during 1959-60 amounted to £484,000, bringing the total payments by the Commonwealth in respect of the scheme to £655,000. It is estimated that £1,000,000 will be required in 1960-61.

Encouragement of Meat Production. - The States Grants (Encouragement of Meat Production) Act 1949- 1954 provides for the payment of £2,166,000 to the States of Queensland and Western Australia for the construction of new and improved facilities for the movement of cattle. It is estimated that final payments amounting to £17,000 will be made under this Act in 1960-61. The distribution of the grants in each year since their commencement in 1950- 51 is shown below: -

 

II.   Other Payments to the States.

In addition to payments to or for the States included in Part VI. of the Estimates, various other payments are made each year which might be regarded as coming within the category of payments to the States. These are set out in the following table: -

 

Tuberculosis Benefits- Maintenance. - Under the Tuberculosis Act 1948, the Commonwealth reimburses the States for maintenance expenditure incurred by the States in the diagnosis, treatment and control of tuberculosis to the extent that expenditure in any financial year exceeds that for the year 1947-48. Expenditure in recent years and the estimated expenditure for 1960-61 are set out in the following table: -

 

Railway Standardization. - Under the Railway Standardization (New South Wales and Victoria) Agreement Act 1958, the Commonwealth has agreed to finance the construction of a standard gauge rail link between Albury and Melbourne, at an estimated cost of £10,726,000. Each State is to repay 15 per cent. of the cost by instalments over a period of 50 years. Expenditure to 30th June, 1960, totalled £5,769,000 and an amount of £4,750,000 is required in 1960-61 to cover the major portion of the work outstanding. The line is scheduled for completion towards the end of 1961.

The Commonwealth is also providing funds for rail gauge conversion work in South Australia under the Railway Standardization (South Australia) Agreement Act 1949. The State is to repay three-tenths of the cost of this work by instalments over a period of 50 years. An amount of £10,000 has been included in the Estimates to enable preliminary survey work in the Peterborough Division of the State to be continued. Expenditure in 1959-60 was £51,000.

Cattle Tick Control.- Since the 1920's the Commonwealth has made annual payments to the State of New South Wales towards the cost of cattle tick control and eradication measures in that State. Commonwealth expenditure on the scheme since 1953-54 has been as follows: -

 

Dairy Industry Extension Grant. - This grant is made to promote improved farm practices in the dairy industry. Estimated expenditure in 1960-61 is £250,000. It is estimated that £240,000 will be paid to the States and that the balance of £10,000 will be expended by the Commonwealth on projects common to a number of States.

Payments to each State in the last seven years, together with the estimates for 1960-61, are as follows: -

 

Grant for Expansion of Agricultural Advisory Services. - These payments were introduced in 1952-53 in order to encourage expansion of agricultural advisory services by the State Departments of Agriculture and thus promote increased farm efficiency. Expenditure in 1959-60 was £218,000 and the Estimates for 1960-61 provide for an expenditure of £264,000 on this scheme. In addi tion, some expenditure is incurred directly by the Commonwealth each year on projects common to a number of States. Payments to each State in recent years are set out below: -

Natural Disaster Payments. - In the event of serious floods, cyclones, droughts and bushfires, the Commonwealth has, upon request, provided to the State concerned on a £ for £ basis financial assistance for the relief of personal hardship and distress. The Commonwealth has also made special grants to States for the restoration of flooddamaged roads, bridges and the like, where the work involved placed an undue burden on the finances of the State concerned. It is in the nature of these grants that the need for them cannot be foreseen. The estimates for 1960-61 represent the balance available of an emergency grant offered by the Commonwealth to Queensland for cyclone relief and the full amount of a grant offered to Tasmania for flood relief.

Payments from Consolidated Revenue to the States for flood, cyclone, drought and bush-fire relief since 1953-54 are set out below: -

 

 

Total expenditure on Capital Works and Services is estimated to be £139,921,000 in 1960-61, or £2,139,000 less than in 1959-60.

The reasons why the estimates for some items show significant variations from actual expenditure in 1959-60 are:-

Australian National University. - Expenditure is estimated to increase by £325,000 in 1960-61 largely because of the construction af a library building and additional requirements for furniture and equipment.

External Affairs. - Increased provision has been made in 1960-61 for the improvement of accommodation at various Australian diplomatic establishments overseas.

Treasury. - Practically all of the estimated increase in expenditure is due to the provision made for expenditure on the construction of a new Government Printing Office in Canberra.

Interior. - The increased provision for 1960-61 includes an additional £1,405,000 for the erection of Commonwealth offices and other buildings outside the Australian Capital Territory, principally the! Commonwealth offices under construction in Brisbane and Sydney. An amount of £133,000 has also been provided for plant and equipment required by the Bureau of Meteorology; in previous years, this expenditure has been financed from votes other than those for Capital Works and Services.

Civil Aviation. - Estimated expenditure in 1960- 61 consists of £2,425,000 for the works programme and £1,783,000 for the acquisition of sites and buildings. The latter provision includes £1,450,000 for the acquisition of land at Tullamarine and at the Brisbane and Perth Airports. In 1959-60 £2,202,000 was spent on the works programme and £725,000 on the acquisition of sites and buildings. The provision of £1,850,000 for technical equipment covers the purchase of navigation, traffic control, radio and electrical equipment, aerodrome maintenance plant, vehicles and the replacement purchase of one light aircraft for testing airways facilities.

Capital for Qantas and T.A.A. - The provision of £1,500,000 for 1960-61 includes £400,000 for Qantas Empire Airways Ltd. and £1,100,000 for the Australian National Airlines Commission (T.A.A. ). Qantas requires £200,000 for further development of ground facilities in Australia and £800,000 towards the cost of aircraft purchases and modifications, these amounts being offset by an expected receipt of £600,000 from T.A.A. for assets in New Guinea. The T.A.A. requirement of £1,100,000 comprises £600,000 for payment, to Qantas for assets in New Guinea and £500,000 towards a programme of expenditure on aircraft, ground facilities and equipment.

Customs and Excise. - The lower provision in 1960-61 results largely from the fact that expenditure in 1959-60 included the cost of purchasing a site for a new Customs House in Melbourne.

Repatriation. - The estimated increase in expenditure relates mainly to the new ward and kitchen being constructed at the Repatriation General Hospital, Hobart.

Shipping and Transport - Railway Standardization. - Under the Railway Standardization (New South Wales and Victoria) Agreement Act 1958, the Commonwealth has agreed to finance the construction of a standard gauge rail link between Albury and Melbourne, at an estimated cost of £10,726,000. Each State is to repay 15 per cent, of the cost by instalments over a period of 50 years. Expenditure to 30th June, 1960. totalled £5,769,000 and an amount of £4,750,000 is required in 1960-61 to covet the major portion of the work outstanding. The line is scheduled for completion towards the end of 1961.

The Commonwealth is also providing funds for rail gauge conversion work in South Australia under the Railway Standardization (South Australia) Agreement Act 1949. The State is to repay three-tenths of the cost of this work by instalments over a period of 50 years. An amount of £10,000 has been included in the Estimates to enable preliminary survey work in the Peterborough Division of the State to be continued. Expenditure in 1959-60 was £51,000.

Shipping and Transport - Other Items. - The main reason for the estimated increase in expenditure is that £240,000 has been provided this year for a programme of replacement of lighthouse supply vessels. Expenditure on this programme in 1959-60 was negligible.

Territories. - Expenditure by the Department of Territories in 1960-61 is estimated to be £157,000 less than in 1959-60 because no provision is being made this financial year for any Commonwealth payment to the Christmas Island Phosphate Commission. The final payment under the arrangements with the New Zealand Government to increase the rate of production of phosphate on this island was made in 1959-60.

Snowy Mountains Hydro-Electric Authority. - Provision is made for the virtual completion during 1960-61 of the remaining three major projects comprising the Upper Tumut section of the Scheme and for continuation of preparatory work on the Snowy-Murray section of the Scheme. Payments to contractors constructing the former three projects will be substantially less than in 1959-60.

Commonwealth Scientific and Industrial Research Organization. - Estimated expenditure on the Giant Radio Telescope and on the Phytotron account for £164,000 of the increase under this head. It is proposed to spend £494,000 more than last year on the works programme and £163,000 less on the acquisitions programme. The main works for which increased provision has been made are the food preservation laboratory at Ryde and the biochemistry and genetics laboratories at Canberra, construction of which was commenced last year.

Australian Atomic Energy Commission. - The bulk of the Commission's expenditure in 1960-61 will be on buildings and works at the Lucas Heights research establishment; £827,000 is provided for buildings and works, compared with £1,017,000 in 1959-60. Scientific plant and equipment is estimated to cost £474,000 in 1960-61, compared with £391,000 in 1959-60.

Railways. - The net increase of £159,000 in estimated capital works expenditure comprises an increase of £329,000 in general capital works, such as permanent way -improvement, locomotives, rolling stock, buildings, &c, and reductions of £100,000 in the advance to the Plant and Stores Suspense Account and of £70,000 in expenditure on the Stirling North-Marree railway.

Post Office. - The growing demand for telephone services necessitates additional expenditure on technical equipment. An additional £1,000,000 has been provided for expenditure on the installation of a co-axial cable between Sydney and Melbourne. The provisions for the works and acquisitions programmes are, respectively, £627,000 greater and £113,000 less than expenditures last year.

Broadcasting and Television. - Expenditure under this head will be less this financial year because the bulk of the capital expenditure involved in establishing national television in Brisbane, Adelaide, Perth and Hobart was incurred in 1959-60.

Northern Territory. - The increased provision for the Northern Territory includes increases of £332,000 for buildings and works, £296,000 for the Northern Territory Housing Commission and £71,000 for loans to church organizations for the erection of residential accommodation. Provision of £10,000 is made for loans to primary producers for water development and £54,000 is provided for the construction of a new Government mining battery.

Australian Capital Territory. - The main factors in the estimated net increase of £396,000 for the Australian Capital Territory are increases of £482,000 in the provision of loans to co-operative building societies, £348,000 for health facilities and £165,000 for electrical engineering works, and a decrease of £500,000 in expenditure by the National Capital Development Commission.







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